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Why Is Microsoft Seeking New State Laws That Allow it to Sue Competitors For Piracy by Overseas Suppliers?

By Pamela Jones et al.

Microsoft seems to be trying to get its own personal unfair competition laws passed state by state, so it can sue US companies who get parts from overseas companies who used pirated Microsoft software anywhere in their business. The laws allow Microsoft to block the US company from selling the finished product in the state and compel them to pay damages for what the overseas supplier did.

You heard me right. If a company overseas uses a pirated version of Excel, let's say, keeping track of how many parts it has shipped or whatever, and then sends some parts to General Motors or any large company to incorporate into the finished product, Microsoft can sue *not the overseas supplier* but General Motors, for unfair competition. So can the state's Attorney General. I kid you not. For piracy that was done by someone else, overseas. The product could be T shirts. It doesn't matter what it is, so long as it's manufactured with contributions from an overseas supplier, like in China, who didn't pay Microsoft for software that it uses somewhere in the business. It's the US company that has to pay damages, not the overseas supplier.

Awful, I know. But the real question is, Why? Why is Microsoft doing this? Does Microsoft need a new revenue stream, now that folks are switching to smartphones instead of PCs? Or is it something worse, something Machiavellian? I ask that because I noticed two things, one, that Microsoft said that it came up with the laws because it is dissatisfied with patent law and two, something odd and frankly alarming in the Washington State version of this bill that leads me to suspect that this is Microsoft's Plan B in its litigation storm against Linux -- its Ace in the hole in case the Supreme Court decides that its software is unpatentable.

Not that Microsoft would mind having more than one way to harass Linux and it competitors in general, or two revenue streams without having to actually work to make better products. I'd like to show you how Open Source is deliberately excluded, though, a deliberate carve out.

Full post as published by Groklaw on March 24, 2011 (boomark / email).